All contingent liabilities should be classiﬁed as either current or long-term liabilities on the statement of ﬁnancial position for the current period.

Question

Quizplus · Accepted Answer

Contingent liabilities are not classified as current or long-term liabilities on the statement of financial position because they are potential obligations that depend on a future event that may or may not occur. They are disclosed in the notes to the financial statements unless the possibility of an outflow of resources embodying economic benefits is remote.

All Contingent Liabilities Should Be Classiﬁed as Either Current or Long-Term